Friday, December 07, 2018

In Novartis v. Ezra, CAFC extends Merck & Co. v. Hi-Tech Pharmacal Co., so that obviousness-type double patenting does not invalidate a validly obtained PTE

The outcome of Novartis v. Ezra:

This case concerns the interplay between a patent
term extension (PTE) granted pursuant to 35 U.S.C. § 156
and the obviousness-type double patenting doctrine. The
Delaware District Court concluded that, in accordance
with statutory construction principles and as a logical
extension of this court’s holding in Merck & Co. v. Hi-Tech
Pharmacal Co., 482 F.3d 1317 (Fed. Cir. 2007), obviousness-type
double patenting does not invalidate an otherwise
validly obtained PTE under § 156. We agree and
accordingly affirm.

The issue

Although § 156 recognizes that a patent owner may
own multiple patents relating to a product, a method of
using that product, and/or a method of manufacturing the
product, nothing in the statute restricts the patent owner’s
choice for patent term extension among those patents
whose terms have been partially consumed by the regulatory
review process. Importantly, Congress did not,
through § 156, compensate a loss of term for all patents
affected by regulatory review. In striking a balance
between the competing interests of new drug developers
and low-cost generic competitors, Congress limited a PTE
grant for such a patent owner to only one of its patents.
Ezra argues that Novartis violated § 156(c)(4) because,
in its view, two patents were extended here: the
extension of the ’229 patent’s term “effectively” extended
the ’565 patent’s term as well, because the ’229 patent
covers a compound necessary to practice the methods
claimed by the ’565 patent.
We agree with the district court, however, that there
is no reason to read “effectively” as a modifier to “extend”
in the language of § 156(c)(4). As a basic principle of
statutory construction, courts “ordinarily resist[] reading
words into a statute that do not appear on its face.” Bates
v. United States, 522 U.S. 23, 29 (1997). Further, as the
district court found, “throughout the rest of § 156, ‘extend,’
‘extension,’ and ‘extending’ refer to the legal status
conferred upon a patent chosen to benefit from PTE.”
Novartis, 2016 WL 5334464, at *2 (citing 35 U.S.C.
§ 156(a) and (b)). This legal status is the literal changing
of the patent’s expiration date by the Director under
§ 156, ensuring a government-granted de jure exclusionary
right for an extended time period—as opposed to an
“effective” or “de facto” exclusion. Section 156(c)(4)’s
language that “in no event shall more than one patent be
extended under subsection (e)(1) for the same regulatory
review period for any product” was intended to limit a
legally conferred PTE (not an “effective” or “de facto”
PTE) to one patent selected by the patent owner. Here,
only the ’229 patent was selected and then legally extended
with a certificate of extension “recorded in the official
file of the patent and . . . considered as part of the original
patent.” 35 U.S.C. § 156(e)(1). That the method of the
’565 patent cannot be practiced during the ’229 patent’s
extended term is a permissible consequence of the legal
status conferred upon the ’229 patent by § 156.


This case also presents the question of whether the
’229 patent is invalid due to obviousness-type double
patenting because the term extension it received causes
the ’229 patent to expire after Novartis’s allegedly patentably
indistinct ’565 patent. We conclude, as a logical
extension of our holding in Merck & Co. v. Hi-Tech Pharmacal
Co., that obviousness-type double patenting does
not invalidate a validly obtained PTE in such a scenario.
In Merck, U.S. Patent No. 4,797,413 was terminally
disclaimed after the expiration of U.S. Patent No.
4,677,115 to overcome an obviousness-type double patenting
rejection during prosecution. 482 F.3d at 1318–19.
The ’413 patent later received a PTE of 1,233 days pursuant
to § 156. Id. at 1319. Appellant Hi-Tech Pharmacal
Co. argued that “as a condition for the lifting of the double-patenting
rejection and thus the grant of the ’413
patent, Merck disclaimed any extension of its term beyond
the expiration of the ’115 patent and is thus foreclosed
from obtaining a term extension under § 156.” Id.
at 1321. This court upheld the validity of the ’413 patent’s
term extension grant. Id. at 1324. We first recognized
that a straightforward reading of § 156 mandates a
term extension so long as the other enumerated statutory
requirements for a PTE are met. I


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